Saudi Arabia outlines plans for economic transformation

Saudi Arabia has released extensive details of its National Transformation Plan, as it looks to reduce its dependency on oil revenues and diversify its economy.

Among the moves outlined in the 112-page Vision 2030 document, released in the early hours of Tuesday in Jeddah, includes plans to cut state spending on salaries and details a bold move away from its economic reliance on hydrocarbons.

The National Transformation Plan, published online today, also includes a bid to balance the budget by 2020, with debt rising from 7.7% currently up to 30% in 2020.

One of the Saudi government’s challenges has been trying to cut back on state wages as a proportion of its budget from 45% currently down to 40% by 2020.

About two thirds of Saudi workers are currently state employed but the proposals hope to create more than 450,000 new jobs in the private sector by the deadline.

The slump in oil prices across the last 18 month led to the moves in early April, as reported, when deputy crown prince Prince Mohammed bin Salman unveiled his radical National Transformation Plan (NTP).

The plans included the creation of what is planned to be the world’s largest sovereign wealth fund; a more-than-trebling of the country’s income that is derived from non-oil sources; and a balancing of the country’s the budget.

The NTP, which includes more than 500 projects and aims to boost the non oil revenue to 530bn riyals (US$141bn) by 2020.

Since April additional plans have emerged, included moves towards the tourism industry, as reported, to help the region’s finances. Other industries such as financial services will play a major part in helping drive the economy.

Long-standing commitments to open a financial district to rival Dubai’s International Financial Centre and other global finance markets have also been resurrected recently. Though the area earmarked for the development remains an unfinished construction site, 10 years on, as reported here, plans are now afoot to restart work.